Helping hand - franchise consultants - includes related article on The Basket Connection franchise - Franchise & Biz Op Spotlight

Entrepreneur, June, 1996 by Janean Chun, Holly Celeste Fisk

After you've Planted the ideas and painstakingly cultivated your company, it seems almost sacrilegious to bring in some outsider to harvest the fruit. Yet many of those exploring franchising as a means of expanding their businesses are fighting their natural tendencies to cling to their precious companies. Due to the complexities and legalities of the often precarious franchisor-franchisee relationship, companies are loosening their grip and viewing outside help as an increasingly popular option to help them franchise their businesses.

When Guardsman Products Inc., an 80-year-old wood-coating products company based in Grand Rapids, Michigan, started its furniture repair and restoration franchise, vice president of consumer products Kip Vander Hyde opted to bring an outside executive on staff as director of franchise operations. "We considered both options: picking someone from our sales organization who had been with the company for a number of years, or going outside and getting someone with franchise experience," says Vander Hyde. "After analyzing it, because we had been not a franchisor but rather a direct supplier to traditional retail outlets, we decided it was more important to find someone who understood the various subtleties and nuances of a franchise business."

That someone was Tony Ziegler, whose previous experience includes directing franchise programs for printing and weight-loss companies and whose expertise is in making franchising programs work, talking to franchise prospects, going through the entire development and recruitment process, and providing ongoing support when the franchisees are operational. In short, Ziegler says he was hired for his ability "to ensure a win-win situation."

Ziegler reveals that the secret to this win-win situation--elusive to so many in franchising--is to grow carefully rather than quickly. "The approach is not just to sell," he says, "but also to grow by recruiting the best possible franchise owners."

Unfortunately, not every franchise consultant subscribes to the same philosophy. Many so-called franchise consultants are merely glorified salespeople, focused on the short-term and out for the hard sell. "There used to be about five or six franchise consultants across the country. Now there are more than 100," says Edward Kushell, owner of Franchise Consulting Group in Los Angeles. "Because these consultants are [competing] for work, they'll encourage people to franchise their businesses who really shouldn't. So while it's important to get a consultants who has the objectivity to tell you whether franchising makes sense for you, the problem is, it's not self-serving for most consultants to be objective."

Often, unscrupulous consultants will play on a potential franchisor's greed for speed. "Most people who want to franchise think they're going to be the Golden Arches of their industry. And that [ideal] generally moves people to expand more quickly than they should," says Kushell. "You need someone who will tell you the truth about the potential pitfalls rather than what a wonderful business you have and why you should franchise it."

The fear of such hidden motives scared Roy Langenwalter away from hiring a consultant. The founder of Langenwalter Carpet Dyeing, a carpet color restoration franchise based in Placentia, California, decided to franchise his business himself (with the help of his sons) in 1982, rather than risk an outsider growing the company in a way that made him uncomfortable.

"While some companies put the emphasis on selling franchises, about 80 percent of our effort is in making a franchise successful," says Langenwalter. "The loyalty family members contribute is important when you're putting people in business. Our family name is on the company, so there's an added concern that we do the right thing."

Like Vander Hyde, Langenwalter considered both options before making his decision, even going so far as to interview various franchise consultants. "Everyone I interviewed wanted to expand very quickly," Langenwalter says. "And no one seemed to have a lot of interest in after-sale support, so we were at odds right there."

Still, Langenwalter admits that franchising without any previous experience meant learning by trial and error, including an unsuccessful attempt to sell area franchises. Despite the road bumps, however, he believes his decision is about to pay off. "We've gone at a slower pace than a lot of other companies, but we now have more than 160 franchises," he says. "And we're primed right now for expansion--to grow to 1,000 franchises by the year 2000--not because of our sales ability but because of the ability we've developed to support and train franchisees."

* THE RIGHT ONE

Before you write off the idea of a consultant, understand that duplicating Langenwalter's independent success is likely to be as tricky as pulling a rabbit out of a hat. While most small-business owners could undoubtedly run their business with their eyes closed, "franchising is a totally different business," says Kushell. "You're not just operating one store--you're setting up a franchise relationship and a whole system that deals with legal, marketing, accounting, operational support and training. Mistakes can lead to serious consequences. So using [consultants] who have been there many times before just makes sense."